Filed under: Newspapers, Housing

Losing your house should be bad enough, but once you add in huge and often questionable foreclosure fees and taxes (!), it really stinks.

According to The New York Times, “As record numbers of homeowners default on their mortgages, questionable practices among lenders are coming to light in bankruptcy courts, leading some legal specialists to contend that companies instigating foreclosures may be taking advantage of imperiled borrowers.”

Katherien Porter, a law professor at the University of Iowa, studied mortgages in Chapter 13 bankruptcy and found that half contained questionable fees.

Families in foreclosure are extremely vulnerable to this malfeasance — they lack the resources to fight it. If they could afford a protracted legal battle over their foreclosure, they wouldn’t be in foreclosure!

Back in August, I wrote about an absolutely insane IRS policy that require home losers to pay the IRS taxes on the amount of a loan that is forgiven in foreclosure.

There’s going to be a lot of foreclosures in the next few years — some experts suggest that 20% of subprime loans made in 2006 will end there. We need to make sure that homeowners who end up in this sad situation are not further victimized … by unscrupulous lenders and a greedy Uncle Sam.

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This entry was posted on Wednesday, November 7th, 2007 at 2:52 am and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.